Bid talk boosts Smith & Nephew again

31st Aug 2011 10:33

Shares in replacement hip manufacturer Smith & Nephew moved sharply higher on Wednesday amid renewed talk of a bid for the company.Shares in the company were higher yesterday and added more than 7% today, bringing them back to the levels at which they sat ahead of the recent market decline. According to rumours, Smith & Nephew's peer Stryker could be interested in moving for the group, with a possible offer of between 850p and 900p.Smith & Nephew has also been linked with the US healthcare business Johnson & Johnson. Smith & Nephew was helped yesterday by broker Deutsche Bank starting coverage on the company with a "buy" rating and a 775p target price.Some analysts are doubtful as to whether Smith & Nephew is a credible takeover target.Justin Smith of MF Global said he believes an acquisition of the firm by Stryker or Johnson & Johnson would not be cleared "because the combined market shares of the hip and knee implant businesses would be anti-competitive."At 10.50am, shares in Smith & Nephew were up by 5% at 31.5p. ---RG